Milei details Central Bank charter reforms, vows to end fiscal financing

Argentine President Javier Milei has outlined significant proposed changes to the Central Bank's organic charter, with a primary focus on strictly prohibiting the financing of the national treasury. Milei stated that this practice, which he claims was enabled by a 2012 modification to the charter, led to indiscriminate monetary issuance and contributed to the country's hyperinflationary environment upon his administration's arrival.

“

What the organic charter allowed was to issue indiscriminately and for any reason. The consequence is obvious: when we came to power, we had an inflation of 1.5 daily... You don't have to be a genius to look at the dynamics of inflation.

"What the organic charter allowed was to issue indiscriminately and for any reason. The consequence is obvious: when we came to power, we had an inflation of 1.5 daily... You don't have to be a genius to look at the dynamics of inflation," Milei remarked, referencing the law's changes during Mercedes Marcó del Pont's tenure at the Central Bank. He argued that this alteration weakened the bank's independence and fueled monetary expansion.

“

We are going to categorically prohibit fiscal financing: it will be punishable by law. Also, we are going to target the Executive Branch and members of the legislative branch who want to do absurd things by passing laws that do not have budgetary backing.

Milei specifically targeted Article 3 of the current charter, which defines the Central Bank's objectives. He announced plans to "categorically prohibit fiscal financing: it will be punishable by law." He also indicated measures against the executive and legislative branches if they enact laws lacking budgetary backing. The president expressed optimism regarding the upcoming June inflation figures, anticipating a rate of around 2% or slightly lower, which he described as "good news."

“

Here the important thing is how inflation is killed and issuance stops. That is what we have done and sooner or later it will go down. That process was delayed due to politics.

Addressing concerns about when economic recovery will reach ordinary Argentines, Milei asserted that the country is currently growing five times faster than throughout the entire previous century. However, he cautioned that rectifying a century of policy errors will take time, stating, "You cannot remedy 100 years of doing things wrong in two and a half years. It is a process that demands time, nothing is achieved overnight."

“

You cannot remedy 100 years of doing things wrong in two and a half years. It is a process that demands time, nothing is achieved overnight.